Voter rejection of tax hike could spark mass layoffs in Klein ISD

With growth continuing for the Klein Independent School District, its board recently approved the design for the districts 33rd elementary school. Now, the district is considering postponing the school’s launch, which was supposed to open in 2019. Cost of construction for the new campus is $24.4 million and will be located at south of Spring Stuebner at Frassati Way.

Photo: Klein ISD

Klein ISD could cut hundreds of teacher and staff jobs to offset a $30 million budget deficit after voters last week rejected a nine-cent property tax hike.

The district’s board of trustees will hold a series of meetings Friday to discuss the looming budget crisis.

Approval of the tax hike would have put nearly $29 million additional dollars into the district’s coffers, helping to offset Klein’s projected budget deficit of $30.2 million.District officials had planned to cut about $8 million from the budget if the tax increase passed.

Now, officials say they must cut an additional $22.2 million in spending.

“We must now approach the more than $30 million deficit using a framework that prioritizes ensuring that these reductions are as far away from students as possible and minimizing current employees from losing jobs,” Klein ISD Superintendent Bret Champion wrote in a statement to news media. “Our priority is our students and our Klein family.”

The 2018-2019 budget must be finalized and adopted by Aug. 27.

Before the election, district officials wrote on Klein ISD’s website that as many as 525 positions could be cut if the tax increase did not pass. They said staff cuts likely would be necessary because payroll and benefits make up about 91 percent of the district’s operating budget.

Klein ISD can no longer stave off cuts by pulling money from its “rainy day” reserve fund balance, which is how some local districts have been offsetting their deficits in recent years. An amount equivalent to 25 percent of the district’s annual operating expenses now sits in Klein ISD’s fund balance, the minimum the district is required to keep on hand according to board policy.

Earlier this year, Klein ISD leaders gave the Board of Trustees two options to balance the budget: make multimillion-dollar cuts or hope voters approve a tax increase.

The board approved the election at a May 14 board meeting, about a month before the vote.

That, said state Sen. Paul Bettencourt, who represents a large swath of Klein ISD and other northwest Houston-area school districts, left too little time to educate and mobilize voters.

The district, he said, should have scheduled the tax vote for the November general election.

“Having elections in the dog days of the summer, this is just not good public policy,” Bettencourt said. “You have very low turnouts. And these types of major issues, and frankly, a nine-cent tax increase is a major issue, should be on the November ballot so voters have time to look at the stuff.”

Passage would have increased the tax rate for the district’s maintenance and operations budget, which pays expenses such as salaries and utilities, from $1.04 per $100 of assessed value to $1.13. For a home valued at $200,000 with a standard $25,000 homestead exemption, the increase would have amounted to an additional $158 a year.

Klein ISD is not the only school district facing a large budget deficit. Seven of Houston’s 10 largest school boards approved deficits of more than $1 million in their 2017-2018 budgets. Last year, Klein ISD’s board approved a budget that required it to draw about $26 million from its reserves.

Local school districts’ budget woes persist even as local property taxpayers’ bills continue to rise annually. That’s because as property values rise and districts collect more taxes, the state kicks in less money for public education, as dictated in the state’s current school finance system. In Klein ISD, for example, state funds accounted for about 57 percent of the district’s revenues in 2014, while local taxpayers’ contributions comprised 43 percent of the budget. Last year, local taxpayers funded about 51 percent of the district's operations, while the state contributed about 48 percent.

Statewide, the state’s share of funding public education slipped from about 48 percent in 2008 to a projected 38 percent next year.

While Texas lawmakers convened special committees to study ways to overhaul the state’s public education funding system, additional state dollars for education could be hard to come by. Lawmakers are expected to start the 2019 legislative session with a $7.9 billion hole in the state’s two-year budget.

As a result, school districts across the state increasingly have looked to raising their property tax rates in hopes of avoiding deep spending cuts.

Pasadena ISD voters, for example, approved a tax increase last year, with about 67 percent voting to boost the ad valorem rate from $1.07 per $100 of assessed value to $1.20.

Art Del Barrio, a spokesman for the district, said the tax hike helped the district eliminate a looming $20 million deficit this year.

“I feel like we were pretty transparent,” Del Barrio said. “Any opposition that we could have had, it would be taking away from kids. When we have opposition to a bond or a (tax ratification election) in your community, they’re going against kids and education.”

Shelby Webb is a suburban education reporter for the Houston Chronicle, covering trends across districts in Harris, Fort Bend, Montgomery and Brazoria counties. She previously worked as an education reporter with the Sarasota Herald-Tribune in Florida from 2013 to 2016 and attended the University of Florida.